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A New & Epic Seven Part Series: Internet Marketing in 2011. Part I: PPC

Published: February 8, 2011

Author: David Rodnitzky

Editor’s Note: I sent an 18 page letter to PPC Associates clients earlier this year. This seven part series is basically that letter. Enjoy (and become a client and get it a month earlier next year!)
A year is a long time in “Internet time.” Companies and concepts that weren’t even a footnote to 2009 were major players in 2010 (e.g., Groupon, FourSquare, AdMob, and DSPs). Below are my “big seven” trends from online marketing in 2010.

  1. PPC: The Fall of Text, The Non-Rise Of MicroHoo. While AdWords initially started as a non-obtrusive, text-based alternative to the “banner blindness” of display ads, there’s no doubt that Google now believes that future revenue growth will come from integrating ‘extra stuff’ into AdWords ad units. To that end, Google launched a bevy of “ad extensions” in 2009 that allow advertisers to supplement their text ads with pictures, maps, and more. A few of the more interesting launches included:
    1. Product Extensions: Show images and prices of relevant products;
    2. Star Reviews: Integrated customer rankings from BizRate;
    3. Phone Number: A custom phone number that can be tracked back to your AdWords campaign;

All of this is in addition to the existing extensions that Google already offered, including a Google Checkout logo and map extensions.
More ad extensions are coming in 2011. Google has a private beta called “Offer Ads” that will allow merchants to run printable coupons in ads. They have also experimented with allowing advertisers to run videos as an extension. It would not surprise me to also see Google launch a product similar to Milo.com (acquired by eBay), which provides in-stock availability of local merchandise. This would be a good complement to the existing product extensions.
The bottom line for AdWords advertisers is that text ads alone aren’t always going to work on Google anymore. It’s important to constantly test the different extensions currently available to determine which one drives the highest incremental click-through rate (CTR) and conversion rate for your business. All PPC Associates (PPCA) account managers are well aware of all of these extensions, so make sure you are asking them regularly about what is best for your business!
Meanwhile, after many months of preparation, Yahoo and Microsoft officially merged their PPC advertising platforms into one unit. The big question on the minds of many PPC advertisers was whether this merger would create “economies of scale” that would suddenly make it more worthwhile to spend time on Yahoo and Microsoft. Prior to the merger, most advertisers felt that they were lucky to get 10% of their total clicks from these two search engines (versus 90% from Google AdWords alone).
Since the merger, the general consensus has been that the combination of the two networks has caused more problems than benefits. Inconsistent volume, low quality clicks, and difficulty controlling partner sites and content networks have all been noted by PPCA team members. As a result, the current feeling on “MicroHoo” is that it is still not a huge opportunity for our clients.
I do think that many of these bugs will be worked out in 2011, so at least management of accounts will be easier. I don’t, however, think that we will see a significant shift in marketshare from Google to MicroHoo. While Bing has made some small gains in marketshare, the search wars are over and Google is the far and away winner. Running on MicroHoo can provide some incremental clicks, but the focus should still be Google first, then MicroHoo (time permitting)!

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